Sporadic commentary on the telecoms and IT market in Latvia and the Baltic States.

Friday, March 21, 2008

Privatization agency objects to Lattelecom nationalization

The Latvian Privatization Agency (LPA), the formal holder of the state's 51 % stake in fixed network operator Lattelecom, has said in a report that it saw legal obstacles to Minister of Transport Ainars Slesers proposal to completely nationalize the company.

According to news reports, Minister of Economics Kaspars Gerhards (whose ministry supervises the LPA) confirmed that there were legal objections to the proposed swap of TeliaSonera's 49 % holding in Lattelecom for the 23 % stake in mobile operator LMT held by the Latvian State Radio and Television Center (LVRTC). Citing confidentiality, he declined to disclose details about the LPA's position. The agency had been asked to evaluate different proposals for changing the current ownership of Lattelecom, including a sale of the company and LMT to TeliaSonera for 500 million LVL.

It also appears now that there will be an emergency meeting of the government on March 27 ahead of a March 31 working visit by Prime Minister Ivars Godmanis to Sweden, where he will most likely meet with TeliaSonera and present the government's position.

The position of the week, if you ask me. We will see what new twists and turns this neverending, increasingly bizarre story takes in April...

2 comments:

I suggest TeliaSonera waits until the Latvian Lats finally will be subject for devaluation. Let the Latvian government muddle some more time (they know how to do that). As soon as the devaluation is a fact and this might already happen during this year, the 500 million LVL will be worth say 20-25% less relative to Swedish crowns. Then again, we might face a devaluation of the Swedish crown as well, but that should normally happen after the day the Latvian Lats will crash...

The slowing economic growth ( and government tax revenue with that ) would likely force the government to sell sooner than you think. 500 mio Ls can save the day and Godmanis should feel it by now. My guess is that the LMT shares will be sold and Laiielecom would be kept for muddling